Best Buy (NYSE:BBY) stock was moving down as the retailer received a downgrade to its stock due to a decline in sales in the company’s electronics category.
Bank of America Merrill Lynch released a note on Monday that lowered its projection of the chain, reducing its rating to an “underperform,” which is its equivalent of a “sell” rating. The firm said that it made the decision due to weakening electronics sales during the busy holiday period for the retail giant.
Analysts added that it has been an especially rough go at it for Best Buy in terms of its iPhone sales in the month of December so far. The cause written by the firm was “deceleration in industry growth trends and continued caution on key product categories such as TVs, Apple products and gaming,” according to Bank of America Merrill Lynch analyst Curtis Nagle.
He lowered the Best Buy price target from $70 to $50. “We are turning more negative as we now see a higher possibility that BBY may see an outright comp miss in 4Q and we believe Street 2019/20 EPS [estimates] are too high,” Nagle added.
“We lower our FY18-20 EPS estimates which are now 1/6/8% below the Street,” the analyst noted.” The decision follows a previous downgrade from Nagle–in November, he had downgraded the stock to “neutral.”
BBY stock is down close to 3.9% on Monday afternoon following the downgrade.
